Every CPP benefit is taxable income. This page covers how each one is reported, roughly how much tax a retiree pays on CPP, tax withheld from payments, and ways the tax on CPP can be lower. It is part of the Canada Pension Plan hub.
CPP Tax Treatment
| CPP Benefit Type | Taxable? | T Slip | Reported On |
|---|---|---|---|
| CPP retirement pension | ✅ Yes | T4A(P) | Line 11400 |
| CPP post-retirement benefit | ✅ Yes | T4A(P) | Line 11400 |
| CPP disability benefit | ✅ Yes | T4A(P) | Line 11410 |
| CPP children’s benefit | ✅ Yes (in child’s name) | T4A(P) | Child’s return, Line 11400 |
| CPP survivor’s pension | ✅ Yes | T4A(P) | Line 11400 |
| CPP death benefit | ✅ Yes | T4A(P) | Line 13000 (or estate return) |
| CPP pension sharing (with spouse) | ✅ Yes (split between spouses) | T4A(P) | Each spouse’s Line 11400 |
How Much Tax on CPP
CPP Alone (No Other Income)
Maximum CPP retirement pension at age 65, starting in January 2026: approximately $1,507.65/month ($18,092/year)
| Scenario | Annual CPP | Federal Tax | Provincial Tax (ON) | Total Tax | Effective Rate |
|---|---|---|---|---|---|
| Maximum CPP only | $18,092 | $0 | $0 | $0 | 0.0% |
| Average CPP only | $10,300 | $0 | $0 | $0 | 0.0% |
At 65 or older, two credits shelter this income: the basic personal amount ($16,452 federal, $12,989 Ontario, 2026) and the age amount ($9,208 federal and $6,342 Ontario at net income up to $46,432 and $47,210). Ontario figures are before the Ontario Tax Reduction, which can lower Ontario tax further.
CPP + OAS (Common Scenario)
| Income Source | Annual Amount | Running Total |
|---|---|---|
| CPP (average) | $10,300 | $10,300 |
| OAS (maximum, ages 65 to 74, October to December 2026) | $9,150 | $19,450 |
| Total | $19,450 |
| Tax Calculation | Amount |
|---|---|
| Federal tax (14% of income above the basic personal amount plus the age amount, $25,660) | $0 |
| Provincial tax (ON, 5.05% of income above $19,331) | $6 |
| Total tax | $6 |
| Effective rate | 0.0% |
CPP + OAS + Other Income
With other income on top, CPP is taxed at your marginal rate. The bracket rates in Ontario for 2026, federal plus Ontario:
| Taxable income | Federal bracket rate | Ontario bracket rate | Combined |
|---|---|---|---|
| Up to $53,891 | 14% | 5.05% | 19.05% |
| $53,891 to $58,523 | 14% | 9.15% | 23.15% |
| $58,523 to $107,785 | 20.5% | 9.15% | 29.65% |
These are bracket rates. For someone 65 or older, the rate on the next dollar is often higher:
- The age amount shrinks. It is reduced by 15% of net income above $46,432 (federal) and $47,210 (Ontario), which adds about 2.9 percentage points while both are shrinking.
- The OAS recovery tax. Above $93,454 of net income (2025 income), 15% of the excess is taken back from OAS (OAS clawback).
- Ontario surtax and the Ontario Tax Reduction. The surtax raises the Ontario rate at higher incomes, and at low incomes the Ontario Tax Reduction phasing out raises it too.
The marginal tax rate calculator works out the combined rate for a given income.
Tax Withholding on CPP
Tax isn’t deducted from CPP payments unless you ask for it, so without deductions you may owe tax when you file. To have federal income tax deducted, or to change the amount, you can:
- sign in to My Service Canada Account and select “Change my tax deductions” in the Canada Pension Plan section,
- complete the Request for Voluntary Federal Income Tax Deductions CPP/OAS (ISP3520CPP) and mail it to Service Canada, or
- call Service Canada.
If you live outside Canada, non-resident tax is deducted automatically, at 25% or less depending on the country.
Source: Service Canada, taxes on public pensions.
CPP Pension Sharing (Income Splitting)
Couples who both receive CPP can share their retirement pensions, so part of the higher-income spouse’s CPP is paid to the other. The combined CPP doesn’t change, but when the two are taxed at different rates the household pays less tax. Who qualifies and how the shared amount is worked out are in CPP pension sharing; you apply to Service Canada on form ISP1002.
Strategies to Reduce Tax on CPP
| Strategy | How It Works | Effect |
|---|---|---|
| CPP pension sharing | Share CPP with a lower-income spouse | Depends on the gap between your tax rates |
| TFSA withdrawals instead of RRIF | TFSA withdrawals aren’t taxable income | Keeps taxable income lower |
| Stay below OAS clawback ($93,454 for 2025 income) | Avoid 15% clawback on OAS | 15% of income above the threshold, up to the whole pension ($9,150/year at 65 to 74) |
| Pension income amount | Credit on up to $2,000 of eligible pension income (CPP doesn’t qualify; RRIF income at 65 or older and workplace pensions do) | Varies |
| Age amount credit | Full amount if net income is $46,432 or less (indexed annually) | Up to $1,289 federally |
| Medical expense credit | Claim if significant medical costs | Varies |
CPP vs QPP
Quebec workers are covered by the Quebec Pension Plan instead of the CPP. QPP benefits are taxable in the same way and are reported on line 11400 of the federal return, as well as on the Quebec return.
Related Resources
Sources
The figures and rules on this page come from these sources, last checked against them between September 5, 2026 and September 29, 2026. How we check facts.
- Canada Revenue Agency: CPP contribution rates, maximums and exemptions
- Canada Revenue Agency: Indexation adjustment for personal income tax and benefit amounts
- Canada Revenue Agency: Current year tax rates and income brackets (2026) - Personal income tax
- Canada Revenue Agency: Pension income amount - Personal income tax
- Canada Revenue Agency: Pension income splitting
- Government of Canada: CPP: When to start your retirement pension
- Government of Canada: CPP: How much you could receive
- Government of Canada: Canada Pension Plan – Monthly payment amounts
- Government of Canada: 2026 Personal Tax Credits Return
- Government of Canada: 2026 Ontario Personal Tax Credits Return
- Government of Canada: Old Age Security payment amounts
- Government of Canada: Old Age Security pension recovery tax
- Justice Laws (Canada): Income Tax Act